Last week, I ran an informal Retirement Week. Instead of providing traditional retirement information, I decided to think a little outside the box.
Get This Book!
It started with a great book by Todd Tresidder, How Much Money Do I Need to Retire?. The book inspires one to think about having income streams in retirement rather than drawing down from a big nest-egg. It articulated my way of thinking about retirement better than I could have myself. With 120 glowing reviews on Amazon I don’t think I can possible oversell it.
My Cashflow Retirement Plan
I then went very “personal” finance by showing you what our plan for an annual $200,000 in retirement income looks like. By diversifying amongst 5 major streams of income, I am confident we can withstand most financial hurdles.
On a related note, one of the streams of income is from rental property. I saw a property yesterday that I found intriguing. I had to tell myself, “No! You have enough for now.” In a year, I’ll revisit it, but I’m fairly sure I’ll have the same conclusion, three is enough.
The interesting thing about this retirement plan is when all the income streams come into play. I spent too much time totaling up the streams, when I should have been plotting them on a timeline. The wife is eligible to retire somewhere around 2021. (I suspect she knows the exact date.) Two of the income properties will have their mortgages paid off in 12/2027. If we wait until 70 to take Social Security it will kick in year 2046. Other key dates are when we’ll be eligible to take IRA withdrawals and when we’ll be required to.
This would make for a kick-ass timeline/graph that I hope to create for next year’s Retirement Week.
Take Away the Lessons
Sometimes I feel I get a little too personal. I’m really not that interesting. I’m never sure if the voyeuristic curiosity of readers outweighs those who could fairly claim, “He talks about himself way too much.”
In any event, I wanted to balance out the overly personal financial details with a follow-up of tried and trusted financial advice that has helped me. Those are covered here: What You Can Learn From My Retirement Income
Know Your Expenses
It’s great to figure out a rough retirement income, but without knowing your expenses, it’s a little like the sound of one hand clapping. So, I dug deep and projected my retirement expenses. It is a crazy idea to plan what expenses 30 years in the future. The biggest thing that I took away from this exercise is that we’ll have the mortgage on our primary residence paid off, which should be our largest single expense. The second biggest thing is that our health care costs should be lower than most people’s due to the military’s great health coverage. However, even that is going to change approximately 1.27 zillion times over the next 30 years.
From a practical standpoint, the numbers on both sides, the income and the expenses, are going to be constantly changing throughout our lives. Given that, I think the only thing to do is evaluate both numbers on an on-going basis and ensure progress is being made. That’s why I plan on running through the exercise again next year. I expect it to be more meaningful with the projection of a timeline of when various incomes become available. If nothing else it will certainly challenge my Excel skills.
Finally the Book Giveaway
You’ve made it this far in the article, it is time for the reward. Mr. Tresidder was kind enough to give me an extra copy of his book, How Much Money Do I Need to Retire?, to give away to a reader. (You’re not getting mine.) If you live in the continental United States (I’m not paying for shipping to Fiji) and are interested in the book, leave a comment here to enter. Make sure you leave a valid email address, so I can contact you if you win. I hate spam as much as you do, so that’s one thing I’ll never do. I will close entries on March 17th at 11:59PM ET and choose a winner randomly.
Excellent topic for this day in age. Thank you sharing your vast knowledge of retirement to those that know very little about it.
Rick Alexander says
This book really sounds interesting and I like to collect as much knowledge as possible on retirement.
Interested retired Lazywoman
Cathy Bolger says
What is the magic number for retirement? What is most important, for instance, is it asset allocation?
Lazy Man says
Cathy, I think you desperately need to read this book even if you don’t win it.
I really enjoyed reading the retirement week posts! I appreciate your courage to lay out your own information about such a personal topic for many of us. Thanks!